1993 GEORGIA-PACIFIC CORPORATION
REPLACEMENT EMPLOYEE STOCK OPTION
(Timber Stock)
THIS AGREEMENT, dated December 17, 1997, by and between GEORGIA-PACIFIC
CORPORATION, a Georgia corporation (hereinafter called the "Company"), and
(hereinafter called "Optionee");
W I T N E S S E T H:
WHEREAS, on January 27, 1993, the Optionee was granted pursuant to the
Georgia-Pacific Corporation 1993 Employee Stock Option Plan the option to
purchase from the Company up to, but not exceeding in the aggregate,
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shares of the Company's then existing common stock ("G-P Common Stock") at a
price of $59.00 per share (the "Original Option"), of which an option to
purchase from the Company up to, but not exceeding in the aggregate,
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shares of G-P Common Stock remained outstanding on December 17, 1997;
WHEREAS, the shareholders of the Company have approved, effective
December 16, 1997, a recapitalization of the Company's common stock, viz. the
conversion of each share of G-P Common Stock into one share of Georgia-Pacific
Corporation--Georgia-Pacific Group Common Stock ("G-P Group Stock") and the
distribution of one share of Georgia-Pacific Corporation--Timber Group Common
Stock ("Timber Stock") with respect to each share of G-P Group Stock (the
"Letter Stock Transaction");
WHEREAS, as a consequence of the implementation of the Letter Stock
Transaction and as authorized under Section 9 of the agreement documenting the
Original Option, it is necessary to convert the Original Option into two
separate options (each independently exercisable), one to purchase shares of G-P
Group Stock and the other to purchase shares of Timber Stock, in each case for a
number of shares equal to the number of shares specified in the Original Option
that remain outstanding on December 17, 1997;
WHEREAS, in making the options conversion contemplated in the Letter
Stock Transaction, the exercise price for the G-P Group Stock option is equal to
the exercise price under the Original Option (the "Original Option Price")
multiplied by a fraction, the numerator of which is the average of the high and
low price for G-P Group Stock on the first date such stock is traded, regular
way, on the New York Stock Exchange (the "G-P Group Stock Price") and the
denominator of which is the sum of the G-P Group Stock Price and the average of
the high and low price for Timber Stock on the first date such stock is traded,
regular way, on the New York Stock Exchange, and the exercise price for the
Timber Stock option will equal the difference between the Original Option Price
and the exercise price for the G-P Group Stock option; and
WHEREAS, the G-P Group Stock options and the Timber Stock options
issued as replacements for the Original Option are to be deemed to be
continuations of the Original Option;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties hereto do hereby mutually agree as follows:
1. This Agreement shall not be deemed to limit or restrict the right
of the Company or any Subsidiary to terminate the Optionee's employment at any
time, for any reason, with or without cause, or to limit or restrict the right
of the Optionee to terminate his employment with the Company or any Subsidiary
at any time. In the event of termination of the Optionee's employment with the
Company and all Subsidiaries, such employee shall be eligible to exercise or
surrender only options on the number of shares that have become available for
purchase pursuant to Section 2 hereof at the time of termination. Optionee's
services shall be subject to the direction of the Board of Directors of the
Company or such Subsidiary or such officer or officers as the respective Boards
may designate from time to time and shall be rendered at such locations as the
respective Boards or any such officer may determine.
2. Subject to the terms and conditions set forth herein, the Company
hereby grants to the Optionee during the period commencing on the date hereof
and ending on January 27, 1998 the option to purchase from the Company, from
time to time, as hereinafter more specifically stated, at a price of $17.01 per
share, up to but not exceeding in the aggregate, shares of Timber
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Stock, which option may be exercised or surrendered, in whole or in part, from
time to time, commencing on the date hereof, but no later than January 27, 1998.
Such period may not be extended pursuant to the provisions of Section 5.
Notwithstanding anything in this Agreement to the contrary, all options granted
hereunder to the Optionee shall terminate as of his date of termination if such
termination is for Just Cause. "Just Cause" for the purposes of this Agreement
shall mean any of the following: (i) the willful and continued failure of the
Optionee to perform satisfactorily the duties consistent with his title and
position reasonably required of him by the Board or supervising management
(other than by reason of incapacity due to physical or mental illness); (ii) the
commission by the Optionee of a felony, or the perpetration by the Optionee of a
dishonest act or common law fraud against the Company or any of its
Subsidiaries; or (iii) any other willful act or omission which is injurious to
the financial condition or business reputation of the Company or any of its
Subsidiaries.
3. The option hereby granted shall be exercised by the delivery to
the Treasurer of the Company or his delegate, from time to time, of written
notice, signed by the Optionee, specifying the number of shares the Optionee
then desires to purchase, together with cash, certified check, bank draft or
postal or express money order to the order of the Company for an amount in
United States dollars equal to the option price of such shares. If the written
notice is mailed, the date of its receipt by the Treasurer of the Company or his
delegate shall be considered the date of exercise of the option by the Optionee.
Within thirty business days after any such exercise of the option
in whole or in part by the Optionee, the Company shall deliver to the Optionee a
certificate or certificates representing the aggregate number of shares with
respect to which such option shall be so exercised, registered in the Optionee's
name.
The Optionee may elect, in lieu of the exercise of the option, to
surrender the option granted hereby, or any portion thereof, by delivery to the
Treasurer of the Company or his delegate, from time to time, of written notice,
signed by the Optionee, specifying the portion of the option the Optionee then
desires to surrender. If the written notice is mailed, the date of its receipt
by the Treasurer of the Company or his delegate shall be considered the date of
surrender.
Within thirty business days after any such surrender of the
option, or any portion thereof, the Company shall deliver to the Optionee a
certificate or certificates representing shares of Timber Stock whose aggregate
fair market value equals the difference between the aggregate fair market value
of the shares covered by the option, or portion thereof, surrendered and the
aggregate option price of such shares.
No fractional shares of Timber Stock shall be issued and in lieu
thereof, if a fractional share of Timber Stock would otherwise be deliverable to
the Optionee, the Optionee shall be paid in cash an amount equal to the same
fraction of the fair market value of a share of Timber Stock.
"Fair market value" as used in this Section 3 shall mean the mean
between the high and low sales prices of Timber Stock on the day preceding the
date of surrender as reported in the Record of Composite Transactions for New
York Stock Exchange listed securities and printed in The Wall Street Journal or,
if no sale of stock shall have been made on that date, on the next preceding day
on which there was a sale of the stock.
4. (a) The Company shall pay a cash bonus as of each date or dates
the option is exercised or surrendered, in whole or in part, in an amount
determined as follows:
(1) If the option is exercised, the market appreciation of
the shares being exercised (defined as the market price of Timber Stock
on the date of exercise, less the option price, adjusted pursuant to
Section l0 hereof, multiplied by the number of shares being exercised
on that date), multiplied by the Bonus Factor; and
(2) If the option is surrendered, the aggregate market
price on the day preceding the date of surrender of the shares received
by the Optionee multiplied by the Bonus Factor.
(3) The "Bonus Factor" is the decimal equivalent of the
fraction
T
1 - T
where T equals the sum of the highest statutory marginal federal and
Georgia income tax rates, expressed in decimal form, applicable to
individuals resident in Georgia on personal service income. For
purposes of calculating the fraction described in this subsection
(a)(2), the "highest statutory marginal federal and Georgia tax rates .
. . on personal service income" shall be the appropriate rates in
effect on the date on which the affected option is exercised or
surrendered (taking into account any retroactive changes in the
specified tax rates).
"Market price" as used in this Section 4 shall be the mean
between the high and low sales prices of Timber Stock on the specified date, as
reported in the Record of Composite Transactions for New York Stock Exchange
listed securities and printed in The Wall Street Journal, or if no sale of stock
shall have been made on that date, on the next preceding day on which there was
a sale of the stock.
(b) Notwithstanding any other provision of this Agreement, in
no event shall any bonus be paid pursuant to this Section 4 in excess of the
market appreciation of the shares being exercised (as defined in Section
4(a)(1)) or the aggregate market value of the shares received by the Optionee
upon surrender (as defined in Section 4(a)(2)).
(c) If the Optionee is employed by a Subsidiary, the Subsidiary
shall pay such cash bonus payable pursuant to this Section 4 or the Company
shall pay such cash bonus as an agent for the Subsidiary, which shall reimburse
the Company.
(d) In all cases, the Company, or the Subsidiary, shall hold
and deposit such cash bonus as withholding taxes.
5. The option hereby granted shall terminate and be of no force or
effect upon the happening of the first to occur of the following events:
(a) The expiration of the time allowed for exercise of this
option as specified in this Agreement.
(b) Subject to the provisions of Section 2, the expiration of
ninety days after the date of the termination (whether voluntary or involuntary)
of the Optionee's employment with the Company and all Subsidiaries, except in
the case of his death or permanent disability while in the Company's employment
or his retirement; provided, that during such ninety-day period, the Optionee
shall have the right to exercise or surrender this option with respect to any or
all shares which were available for purchase by him on the date of such
termination of employment and, in the event of his death or permanent disability
after termination of employment and during such ninety-day period, such deceased
Optionee's estate, personal representative or beneficiary or such disabled
Optionee shall have the right, within such period, to exercise or surrender this
option with respect to any or all shares which were available for purchase by
the Optionee on the date of his termination of employment and which had not been
purchased by him prior to his death or permanent disability.
(c) Subject to the provisions of Section 2, the expiration of
36 months after the date of the Optionee's retirement after a period of
continuous employment by the Company; provided, that during such 36-month
period, the Optionee shall have the right to exercise or surrender this option
with respect to any or all shares which were available for purchase by him on
the date of such retirement and, in the event of his death or permanent
disability after retirement and during such 36-month period, such deceased
Optionee's estate, personal representative or beneficiary or such disabled
Optionee shall have the right, within such period, to exercise or surrender this
option with respect to any or all shares which were available for purchase by
the Optionee on the date of his retirement and which had not been purchased by
him prior to his death or permanent disability.
(d) Subject to the provisions of Section 2, the expiration of
36 months after the date of death or permanent disability of the Optionee during
a period of continuous employment by the Company; provided, that during such 36-
month period, such deceased Optionee's estate, personal representative or
beneficiary or such disabled Optionee shall have the right to exercise or
surrender this option with respect to any or all shares which were available for
purchase by the Optionee on the date of his death or permanent disability.
The Optionee's employment by the Company shall be deemed to
continue during such periods as he is employed by a Subsidiary. If the Optionee
shall be transferred from the Company to a Subsidiary or from a Subsidiary to
the Company or from a Subsidiary to another Subsidiary, his employment shall not
be deemed to be terminated by reason of such transfer. If, while the Optionee
is employed by a Subsidiary, such Subsidiary shall cease to be a Subsidiary and
the Optionee is not thereupon transferred to and employed by the Company or
another Subsidiary, the date that the Optionee's employer ceases to be a
Subsidiary shall be deemed to be a termination of employment, and (subject to
the provisions of Section 2) the option shall terminate 90 days or 36 months (as
the case may be) after such date, and such Optionee shall have the right with
respect to any shares available for purchase on the date of such termination of
employment to exercise or surrender his option at any time within such extended
period.
Optionee's date of termination or retirement shall be deemed to
be his last day worked. For purposes of this Agreement, "retirement" shall mean
voluntary or involuntary (other than for Just Cause) termination of employment
with the Company and all Subsidiaries after having attained age 65 or having
attained age 55 and having accrued 10 years of service for vesting purposes
under the Company's salaried retirement plans. The Optionee's date of permanent
disability shall be the last day of his salary continuation period under the
Corporation's policy providing for salary continuation for salaried employees
who are medically unable to work because of illness or injury, and Optionee
shall be deemed "permanently disabled" on that date only if he would be "totally
disabled" pursuant to the standards set forth in the Georgia-Pacific Corporation
Long-Term Disability Plan, whether or not Optionee is covered under that plan.
The Plan Administrator (as hereinafter defined) shall have
absolute and uncontrolled discretion to determine whether any authorized leave
of absence or absence on military or government service taken by the Optionee
shall constitute a termination of employment for the purposes of this Agreement.
6. Whenever the word "Optionee" is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to apply to the executors, the administrators, or the person or persons to whom
this option may be transferred by will or by the laws of descent and
distribution, it shall be deemed to include such person or persons.
7. This option is not transferable by the Optionee otherwise than by
will or the laws of descent and distribution and, during the Optionee's
lifetime, may be exercised or surrendered only by him or by his legal guardian
or representative. No assignment or transfer of this option or the rights
represented thereby, or of the right to cash bonuses hereunder, whether
voluntary, involuntary, or by operation of law or otherwise, except by will or
the laws of descent and distribution, shall vest in the assignee or transferee
any interest or right herein whatsoever, and immediately upon any attempt to
assign or transfer this option, or the right to cash bonuses hereunder, this
option shall terminate and be of no force or effect.
8. The Optionee shall not be deemed for any purpose to be a
stockholder of the Company with respect to any shares optioned by this Agreement
as to which the option hereby granted shall not have been exercised or
surrendered and payment and delivery made as herein provided. No adjustment
shall be made for dividends or other rights for which the record date is prior
to the date the shares are issued or transferred to Optionee.
9. The existence of this option shall not affect in any way the
right or power of the Company or its stockholders to make or authorize any and
all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business, or any merger or consolidation of
the Company, or any issue of bonds, debentures, preferred or preference stocks
ahead of or affecting Timber Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or part of its assets
or business, or any other corporate act or proceeding, whether of a similar
character or otherwise.
10. The shares with respect to which this option is granted are
shares of Timber Stock of the Company as constituted on the date of this
Agreement, but if, and whenever, after December 17, 1997, and prior to the
delivery by the Company of all of the shares of Timber Stock with respect to
which this option is granted, the Company shall effect a change in the par value
of Timber Stock, or a change in the number of shares of Timber Stock having par
value into the same or a different number of shares without par value, or a
subdivision or consolidation of shares, or other capital readjustment, the
payment of a stock dividend, or other increase or reduction of the number of
shares of Timber Stock outstanding, without the receipt of consideration by the
Company, then (a) in the event of any increase in the number of such shares
outstanding, the number of shares of Timber Stock then remaining subject to
option hereunder shall be proportionately increased, and the cash consideration
payable per share shall be proportionately reduced, (b) in the event of a
reduction in the number of such shares outstanding, the number of shares of
Timber Stock then remaining subject to option hereunder shall be proportionately
reduced, and the cash consideration payable per share shall be proportionately
increased, and (c) in the event of no change in the number of shares outstanding
in connection with a change in par value of Timber Stock or a change from par
value to no par value, the shares resulting from any such change shall be deemed
to be Timber Stock under this Agreement.
11. After a merger of one or more corporations into the Company, or
after a consolidation of the Company and one or more corporations in which the
Company shall be the surviving corporation, the Optionee shall, at no additional
cost, be entitled upon any exercise or surrender of this option, to receive
(subject to any required action by stockholders), in lieu of the number of
shares as to which this option shall then be so exercised or surrendered, the
number and class of shares of stock or other securities to which the Optionee
would have been entitled pursuant to the terms of the agreement of merger or
consolidation if, immediately prior to such merger or consolidation, the
Optionee had been the holder of record of a number of shares of Timber Stock of
the Company equal to the number of shares as to which such option shall be so
exercised or surrendered. The Plan Administrator shall determine, in its
absolute and uncontrolled discretion, the adjustment to be made and the extent
thereof.
12. Anything in this Agreement to the contrary notwithstanding:
(a) In the event of a merger in which the Company is not the
survivor or a sale of substantially all of the assets of the Company, the
Optionee shall have the right, commencing thirty days prior to such merger or
sale of assets, to exercise immediately on a fully-vested basis each outstanding
option which was granted to him regardless of any exercise restriction contained
in Section 2 of this Agreement; and
(b) In the event that a Change in Control shall occur, the
Optionee shall have the right immediately after the effective date of such
Change in Control, until such time as the option would otherwise expire
according to Section 5 of this Agreement, to exercise on a fully-vested basis
each outstanding option which was granted to him under this Agreement regardless
of any exercise restriction contained in Section 2 of this Agreement.
As used in this Agreement, a "Change in Control" shall mean a change in
control of a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or any successor provision
thereto, whether or not the Company is then subject to such reporting
requirement; provided, however, that, without limitation, a Change in Control
shall be deemed to have occurred if (A) any individual, partnership, firm,
corporation, association, trust, unincorporated organization or other entity, or
any syndicate or group deemed to be a person under Section 14(d)(2) of the
Exchange Act, is or becomes the "beneficial owner" (as defined in Rule 13d-3 of
the General Rules and Regulations under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities entitled to
vote in the election of directors of the Company; or (B) during any period of
two (2) consecutive years (not including any period prior to the adoption of the
Plan), individuals who at the beginning of such period constituted the Board of
Directors and any new directors, whose election by the Board of Directors or
nomination for election by the Company's stockholders was approved by a vote of
at least three quarters (3/4) of the directors then still in office who either
were directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to constitute a
majority thereof; provided, further, that a change in control shall not be
deemed to be a Change in Control for purposes of this Agreement if the Board of
Directors has approved such change in control prior to either (i) the occurrence
of any of the events described in the foregoing clauses (A) and (B) or (ii) the
commencement by any person other than the Company of a tender offer for Timber
Stock not approved by the Board of Directors prior to such commencement.
13. In the event that a Change in Control (as defined in Section 12
above) shall occur, the Optionee shall have the right to elect to receive from
the Company an amount in cash, in a lump sum, for each share of Timber Stock
covered by the Optionee's options granted hereunder, equal to the difference
between the then current exercise price of such option and the greater of: (i)
the highest price per share paid for the purchase of Timber Stock in connection
with the Change in Control and (ii) the highest closing price per share paid for
the purchase of Timber Stock on the principal exchange on which Timber Stock is
listed, or, if Timber Stock is not listed, on the NASD automatic quotation
system, during the 90-day period immediately preceding the Change in Control.
The Optionee may elect to receive such cash payment only during the 30-day
period commencing upon the effective date of the Change in Control and such
election shall be effective with respect to all outstanding options which were
granted under this Agreement. Upon an election to receive such cash payment,
the option to which such cash payment relates shall no longer be exercisable to
the extent of the number of shares covered by the option for which such cash
payment was received. In the event a Change in Control shall occur and this
Section 13 shall become effective, (a) any election pursuant to Section 3 of
this Agreement which the Optionee has to surrender his options issued hereunder
and to receive shares of Timber Stock in lieu of the exercise of such options
shall not be effective, and (b) the Optionee shall also have the right to
receive the cash bonus otherwise payable upon surrender of his option pursuant
to Section 4(a)(2) of this Agreement.
14. In the event that Sections 12 or 13 of this Agreement shall
become applicable, Section 16 of this Agreement shall not be effective.
15. Anything in this Agreement to the contrary notwithstanding, if,
at any time specified herein for the exercise of this option, the delivery of
shares to the Optionee, or for the payment of cash bonuses to the Optionee, any
law or regulations of any governmental authority having jurisdiction in the
matter shall require either the Company or the Optionee to take any action or
refrain from action in connection therewith or to delay such exercise, then the
delivery of such shares or the payment of such cash bonuses on such exercise
shall be deferred until such action shall have been taken or such restriction on
action shall have been removed.
16. Subject to Section 14 of this Agreement, as conditions precedent
to the granting of the option, cash bonuses and all other rights provided
hereunder, the Optionee and any other person who acquires any rights hereunder
agrees that any dispute or disagreement which shall arise under, or as a result
of, or pursuant to, this Agreement may be determined, either by the Plan
Administrator constituted under the Plan (the "Plan Administrator") or by the
Company's Board of Directors in the Plan Administrator's or the Board's absolute
and uncontrolled discretion; and that any such determination or interpretation
of the terms of this Agreement or any other determination by either such Plan
Administrator or the Board of Directors of the Company shall be final, binding
and conclusive on all persons affected thereby.
17. Anything in this Agreement to the contrary notwithstanding, the
Company and Optionee acknowledge and agree that the Plan was not intended to
provide for the issuance of "incentive stock options" as defined in Section 422
of the Internal Revenue Code of 1986, as amended, and that the options granted
pursuant to this Agreement are not "incentive stock options" as so defined.
18. Any notice which either party hereto may be required or permitted
to give to the other shall be in writing, and may be delivered personally or by
mail, postage prepaid, addressed as follows: Georgia-Pacific Corporation, x00
Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000, Attention: Vice President and
Treasurer, or at such other address as the Company, by notice to the Optionee,
may designate in writing from time to time; to the Optionee at the address
indicated in the Optionee's then current personnel records, or at such other
address as the Optionee, by notice to the Treasurer of the Company at the above
address, may designate in writing from time to time. Such notices shall be
deemed given upon receipt.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officers, under its corporate seal, and the
Optionee has hereunder set his hand and seal, as of this day and year first
above written.
GEORGIA-PACIFIC CORPORATION
By:
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A. D. Xxxxxxx
Chairman, Chief Executive
Officer and President
ATTEST:
W. Xxxxx Xxxxxxx, III, Assistant Secretary
Optionee
NOTE: PLEASE COMPLETE THE ATTACHED PERSONAL DATA SHEET.
OPTIONEE'S PERSONAL DATA
(Please Print)
Full Name
ADDRESS:
SOCIAL SECURITY NUMBER:
DATE OF BIRTH:
Month, Day and Year
DIVISION: LOCATION